In a contemporary economy, creating customer value is an increasingly complex and interdependent process with many stakeholders involved. Suppliers and customers are linked together in supply and value networks comprising different types of actors, which makes customer value creation a key challenge for management. In addition, customers and consumers are becoming increasingly critical of the value supplied, and they assess customer value not only via economic or functional means, but also within emotional and symbolic dimensions (Rintamäki et al., 2007). This trend toward more diverse value perceptions is also strengthened by an increased focus on services, which comprise up to 90% of the total value created nowadays (Spohrer, 2010). Therefore, our project was initiated by this pressing managerial challenge: creating customer value is increasingly vulnerable and complex from both the supply side as well as from the customer perspective.
We argue that the firms that can handle the complexity and vulnerability of customer value creation can reap notable rewards. Current studies concerning value in the supply chain context are conducted mostly from the organizational perspective or business to consumer perspective (Möller, 2006; Zolkiewski, 2011). To bridge this gap, our project—CUSTOR(Determinants of Value and Vulnerability in Customer-oriented Service Networks)—has aimed to address the managerial concerns in customer value management. In this brief report, we discuss our key research findings and ideas for customer value creation in management practice. Figure 1 summarizes the key approaches of the project.
Figure 1 Project framework
During the two years of the project, we have focused on the complex nature of customer value and on the challenges and practices of customer value creation and risk management. The project collected data from the participant companies via qualitative interviews and several expert group panel discussions, analyzes of social networks, and facilitated workshop sessions. The research approach applied in the project was systematic combining (see, e.g., Dubois and Gadde, 2002). The approach allowed us to develop the research strategy and the theoretical frameworks along with the findings from the case studies and workshop sessions.
The approach proved to work especially well for the four interactive workshops carried out in the project in different forms. The first of the workshops was carried out based on the current theory in which the aim was to use a facilitated brainstorming session to obtain conceptual cohesion between the multiple industry cases and to identify the customer value created. The second workshop was developed based on the findings of the first, and it was carried out using Internet-based group decision-making software (MeetingSphere®). The aim in the second workshop was to further analyze the value characteristics and their vulnerabilities. The group decision-making software allowed the simultaneous analysis of the multiple industry cases and discussion of the scenarios. This was particularly helpful in understanding the causalities behind the value making and value vulnerability. Although several different industries were
involved, the value determinants were surprisingly similar. Overall, the results revealed that the organizations themselves have a strong influence on value vulnerability, and many of the risks involved have consequences regarding the functional and emotional value determinants. The third workshop of the project involved the “future wheel” group decision-making method, in which the group was first introduced to the most relevant future trends and thereafter estimated the direct and indirect impact those trends would have. The aim of the workshop was to organize participants’ thoughts and to illustrate the complexity of the impact in terms of the different trends manifesting. The fourth workshopwas constructed based on the third workshop’s results. The aim was to analyze and construct relational hierarchies between the identified factors. The workshop involved the Analytical Hierarchy Process, which proved to be useful in assessing the determinants of value that should be taken into account in the future.
To provide a holistic network perspective, the case firms’ supply networks were analyzed in several ways: Firstly, the value creation processes were mapped, which were thereafter used to gain in-depth understanding from the actors, processes, and causalities in the cases. The value processes were illustrated for the participants, which allowed them to gain a quick understanding of the focus of the particular case.
And more importantly, this allowed a multi-level examination of the value creation from an individual process or actor to the whole network. Finally, after gaining a deep understanding about the networks via qualitative methods, social network analysis (SNA) with value scenarios (normal, identification, analysis, and management action) was carried out. The SNA allowed us to study the strength and direction of the actors’
interlinkages in the network that were related to customer value creation. The analyses revealed, for instance, that the configuration of the network changes in risk situations.
When faced with a risk to customer value creation, the value network connections might change, and the overall connectivity in the network decreases compared to a normal value creation situation.
In addition, explorative, qualitative case studies were conducted among the project partner companies to understand firm-specific factors and distinctions. The qualitative interviews were carried out with an inter-disciplinary research group and the key informants in the six cases. The interviewees were selected based on their experience
with and knowledge about the case. The interviews revealed that customer value was typically quite complex and that the producers usually had to have several years of experience to be able to understand and master the value creation. The products or services themselves might have appeared simple at first, but the value determinants involved and the elements that exposed them to vulnerabilities could be very complicated.
The aforementioned analytical approaches—case studies, network analyses, and interactive workshops—were collaboratively developed by the researchers and the participant companies themselves over the course of the project. We expect that the results are therefore useful in practice in addition to their academic value.
In addition, based on the insights gathered in this project, we administered an Internet-based survey questionnaire that collected responses from 105 companies representing different industries (manufacturing 32%, logistics and storage 23%, retail and trade 10%, other industries 35%) and that were mostly from B2B business. The firms represented companies of different sizes (48 firms over 250 employees, 28 firms with 50–249 employees, and 29 firms with fewer than 50 employees) and ages (most companies were quite well-established, with 45 companies over 50 years of age and most of the rest over 10 years). The respondents held different types of managerial and expert positions. The survey examined issues such as customer value creation and its vulnerability, risk management, and organizational problems in customer value analysis. The results of this survey allowed us to study the broader trends regarding customer value and its vulnerability and management in firms, supply chains, and networks, and the most interesting take-aways are discussed in this report.
Outline and purpose of the report
This report comprises two main sections: The first part describes the relevant concepts of customer value and its management in supply chains and networks. We also reflect on these issues with the evidence collected during the course of this project.
In the second part, the report will propose concrete methods and frameworks that enable companies to identify and analyze the value creation and protection processes and roles and thus improve the management of value vulnerability.
Therefore, the value created for and with the customer is the starting point for this research. To provide improved understanding of this phenomenon, our aim is to examine customer value creation from an explicitly holistic perspective, including actor, offering, and network levels of analysis. This means that we will take into account service benefits and costs as well as the risks related to the non-realization of benefits or the realization of added costs for the customer. The following Table 1Error!
Reference source not found. summarizes the overall frameworks and methods developed and used throughout the project.
Table 1 The toolbox for the identification, analysis, and management of customer value
Identification Analysis Management
Actor / Process
Qualitative and quantitative measurements for the identification, analysis, and management of customer value (survey measurement model; value process mapping)
Risk management abilities (survey measurement model)
Offering / Customer relationship
Perceived customer value analysis (brainstorming methods; group decision support; survey measurement model)
Offering element prioritization (analytical hierarchy process)
Network
Customer value creation network analysis (value process analysis; social network analysis; value creation network role analysis)